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Commentary

Brent closed last night up $1.17 to $65.54, WTI closed at $62.57, up $1.42. Why did we rally last night? Think we have another classic case of market up on rumour and speculation, with the IEA dropping the bombshell of supply crunch time within 5 years, and lowering Venezuelan production. As investment lags behind, with prices wobbling around this 'doing ok' level, there will come a point when it's too late to invest enough to deal with global oil demand - even with increasing U.S. shale. Over the pond and CERA week is in full swing. I read that there is a dinner tonight between OPEC and Shale producers and Mr Barkindo said "...that price levels and production will not be discussed". What else are you going to talk about?!!? That's like going for some tests at the doctors and then not being able to discuss the results with them. Ummm great, thanks a lot. What a strange world we live in at times. Good day.

Fuel Oil Market (March 5)

The front crack opened at -10.50, strengthening to -10.45, before weakening to -10.75. The Cal 19 was valued at -15.00

The front-month EW arbitrage spread of 380-cst fuel oil narrowed on Monday as suppliers locked in more volumes from the European oil hub for delivery into Singapore over April-May, industry sources said. The April EW spread was trading at about $13 a tonne on Monday, 25 cents a tonne lower from the previous session. Asia's front-month viscosity spread climbed 25 cents back to $7.75 a tonne, the eight-month high achieved earlier this week.

Three VLCCs have been chartered over the past week to ship fuel oil from the Rotterdam oil hub in March for discharge into Singapore. Lower VLCC tanker rates along the Rotterdam-Singapore shipping route and improved arbitrage economics have contributed to the increase in fuel oil arbitrage fixtures from the European oil hub to Singapore.

Economic Data and Events

* 3pm: U.S. Jan. factory orders, est. -1.4%, prior 1.7%

* 5pm: EIA releases Short-Term Energy Outlook

* 9:30pm: API issues weekly U.S. oil inventory report

* Today:

** Bloomberg-compiled Refinery Snapshot for U.S. and Canada; gives offline capacity projections for crude units and FCCs

** CERAWeek, with today's speakers including Saudi Aramco CEO Amin Nasser, Schlumberger CEO Paal Kibsgaard, among others, 2nd day of 5

Singapore 380 cSt

Apr18 - 358.50 / 360.50

May18 - 357.75 / 359.75

Jun18 - 357.00 / 359.00

Jul18 - 355.75 / 357.75

Aug18 - 3354.25 / 356.25

Sep 18 - 352.75 / 354.75

Q2-18 - 357.75 / 359.75

Q3-18 - 354.75 / 356.75

Q4-18 - 349.00 / 351.50

Q1-19 - 341.50 / 344.00

CAL19 - 310.00 / 314.00

CAL20 - 232.25 / 240.25

Singapore 180 cSt

Apr18 - 365.75 / 367.75

May18 - 365.00 / 367.00

Jun18 - 364.25 / 366.25

Jul18 - 363.25 / 365.25

Aug18 - 361.75 / 363.75

Sep 18 - 360.25 / 362.25

Q2-18 - 365.00 / 367.00

Q3-18 - 362.25 / 364.25

Q4-18 - 356.50 / 359.00

Q1-19 - 349.25 / 351.75

CAL19 - 319.00 / 323.00

CAL20 - 255.00 / 263.00

Rotterdam Barges

Apr18 345.25 / 347.25

May18 344.50 / 346.50

Jun18 343.50 / 345.50

Jul18 342.00 / 344.00

Aug18 340.00 / 342.00

Sep 18 - 337.50 / 339.50

Q2-18 344.25 / 346.25

Q3-18 339.75 / 341.75

Q4-18 330.50 / 333.00

Q1-19 323.25 / 325.75

CAL19 288.50 / 292.50

CAL20 228.50 / 236.50